Financial Performance - Net income for the three months ended March 31, 2022, was $14.3 million, or $0.78 per diluted common share, compared to $15.2 million, or $0.82 per diluted common share for the same period in 2021[145]. - Return on average equity decreased to 14.58% for Q1 2022 from 16.51% in Q1 2021, while return on average assets decreased to 1.47% from 1.66%[145]. - A decrease of $2.8 million in noninterest income was a primary factor for the $0.9 million decrease in net income compared to the previous year[145]. - Net interest income for Q1 2022 was $30.3 million, an increase of $0.4 million, or 1.4%, compared to $29.9 million in Q1 2021[153]. - Noninterest income for Q1 2022 was $23.7 million, a decrease of $2.8 million, or 10.6%, compared to $26.5 million in Q1 2021[160]. - Income from mortgage banking activities decreased by $5.2 million, or 27.5%, to $13.6 million in Q1 2022, primarily due to a 46.1% decrease in mortgage loan originations[160]. Loan Portfolio and Modifications - Total active loan modifications attributed to COVID-19 were approximately $6.0 million as of March 31, 2022, primarily in the hotel portfolio[141]. - The Bank assisted approximately 2,100 customers with a total of $218 million in the first round of the Paycheck Protection Program (PPP)[143]. - Approximately $217 million in PPP loans have been forgiven by the SBA, leaving approximately $1 million outstanding as of March 31, 2022[143]. - The Bank funded approximately 1,100 PPP loans for a total of $91 million in the second round of PPP, with about $64 million forgiven as of March 31, 2022[143]. - The Company continues to monitor its loan portfolio closely, particularly in the retail, hospitality, and energy sectors, due to the ongoing COVID-19 pandemic[140]. - The allowance for loan losses as a percentage of loans held for investment was 1.62% at March 31, 2022, down from 1.73% at December 31, 2021[157]. - The allowance for loan losses decreased to $39.6 million at March 31, 2022, down from $42.1 million at December 31, 2021, a reduction of $2.4 million, or 5.8%[189]. - Total average loans outstanding during the period increased to $2.48 billion as of March 31, 2022, compared to $2.42 billion as of March 31, 2021[191]. - Total nonaccrual loans were $9.5 million, representing 0.39% of total loans held for investment as of March 31, 2022, unchanged from December 31, 2021[198]. - Nonperforming loans increased to $12.1 million at March 31, 2022, compared to $10.6 million at December 31, 2021[199]. Asset and Deposit Growth - Total assets as of March 31, 2022, were $3.95 billion, compared to $3.71 billion as of March 31, 2021[154]. - Total assets increased by $97.9 million, or 2.5%, to $4.00 billion as of March 31, 2022, compared to $3.90 billion at December 31, 2021[163]. - Total deposits increased by $108.9 million, or 3.3%, to $3.45 billion as of March 31, 2022, compared to $3.34 billion at December 31, 2021[163]. - Noninterest-bearing demand accounts comprised 32.8% of total deposits as of March 31, 2022[214]. - Noninterest-bearing deposits rose to $1.13 billion, accounting for 32.8% of total deposits, compared to $1.07 billion or 32.1% previously[215]. - Total interest-bearing deposits amounted to $2.28 billion with a weighted average rate of 0.34%, down from 0.38% at the end of 2021[216]. Risk Management and Capital - The Company maintains a rigorous enterprise risk management system to enhance risk management effectiveness across the Bank[140]. - The Company has opted not to participate in the Community Bank Leverage Ratio framework and continues to follow Basel III capital requirements[243]. - As of March 31, 2022, South Plains Financial, Inc. reported total capital to risk-weighted assets at $535,998, representing a ratio of 18.22%, slightly down from 18.40% as of December 31, 2021[241]. - Tier 1 capital to risk-weighted assets for South Plains Financial, Inc. was $423,358, with a ratio of 14.39%, compared to 14.49% at the end of 2021[241]. - The estimated amount of uninsured deposits as of March 31, 2022, was $1.08 billion[217]. Equity and Shareholder Activity - Total stockholders' equity decreased to $387.1 million, a decline of 5.0% from $407.4 million at the end of 2021, primarily due to a $30.0 million decrease in accumulated other comprehensive income[237]. - The Company repurchased 106,498 shares of common stock for a total of $3.0 million during the three months ended March 31, 2022, compared to 43,184 shares for $786 thousand in the same period of 2021[244]. - Tangible common equity to tangible assets ratio was 9.11% as of March 31, 2022, compared to 9.85% at the end of 2021[261]. - Tangible book value per share decreased to $20.49 as of March 31, 2022, from $21.51 at December 31, 2021[261]. Interest Rate Sensitivity - The average estimated net interest income at risk for a 100 basis point shift in interest rates should not decline by more than 7.5% over the subsequent one-year period[250]. - The simulated change in net interest income for a +300 basis point increase in interest rates was 5.20% as of March 31, 2022, down from 6.89% at December 31, 2021[252]. Loan Composition and Concentration - The company has a collateral concentration, with 67.8% of loans secured by real property as of March 31, 2022, down from 69.4% at December 31, 2021[169]. - Direct energy sector loans totaled $121.6 million, representing 5.0% of total loans, with an allowance for loan losses of 1.26%[203]. - Restaurant and retail owner-occupied loans amounted to $141.6 million, or 5.8% of total loans, with an allowance for loan losses of 2.65%[204]. - Hospitality and assisted living center loans totaled $116.0 million, or 4.7% of total loans, with an allowance for loan losses of 6.94%[204].
South Plains Financial(SPFI) - 2022 Q1 - Quarterly Report